Voluntary benefits are no longer a secret.

As health care costs have escalated over the last decade, it's been an obvious decision for many employers to reduce ancillary line funding, diverting those dollars to help keep a company's major medical plan in force and within reach of their employers.

That said, the method by which employers have tapped the voluntary market hasn't always made a lot of sense in the context of their goals and objectives.

Communication has been sorely lacking. But it's not just employee communications that have fallen short. The means by which benefit advisers and brokers have communicated with their clients has also been less than ideal.

"Most of my groups are discontinuing their employer paid ancillary line coverages and just bringing in voluntary benefits and using that money to offset the increase in major medical," Scott Reber, vice president of HMS Insurance Associates, says.

It's a trend that continues to build, according to Jack Kwicien, principal of Baltimore's Daymark Advisors and a regular EBA columnist.

"It's the only segment of the insurance industry that's growing," he notes.

And while more and more attention is being paid to voluntary benefits as a path forward for benefit advisers in light of increasing group medical costs as well as uncertainty about the adviser's role post reform, the focus has also revealed serious deficiencies in both the employer-sponsored and employee-pay-all benefits arrangements.

Nelson Griswold, founder of Cross-Sell Solutions, a firm focused on helping traditionally-minded group health brokers tap and successfully leverage voluntary offerings for their clients and their balance sheets, describes how individual voluntary enrollments helped him better understand just how poorly many workers understand not just new voluntary benefit offerings, but also many longstanding employer-paid core programs.

"It's astounding to me how unaware they are of their benefits," Griswold says.

He describes how some employees skip annual physicals and other wellness exams out of a mistaken belief that they are on the hook for sizeable co-pays.

That's ignorance that hurts everyone. If an employee thinks the coverage is skimpy, it's the employer's recruitment and retention powers that take the hit.

Meanwhile, both sides lose as the opportunity for lower-cost preventive medical interventions are lost because workers think they can't afford routine checkups. "It's tragic," Griswold insists. "They don't understand their benefits. They don't understand the value of them. They don't understand what's available to them."

Francesca Lynch, a sales executive for Crawford Advisors, insists the problem cuts across the employer-sponsored/voluntary divide.

"The cost issues aside, whether we are talking about employer-paid benefits or employee-paid voluntary, the biggest issue I see is employee engagement," she says. "Getting them involved and seeing the value of what is being offered to them either as an option or what is being given to them by their employer."

Employers are in a tough and sometimes confusing communication position, she admits. Some companies have had to prohibit merit increases or even institute salary reductions in addition to other types of benefit reductions and other cost-saving efforts to weather the current economic storm. That's driven some to take a sheepish approach to employee-paid offerings. And while it is understandable that employers loathe talking about how workers should spend their money after the company has either frozen or reduced salaries and other forms of compensation, Lynch says it is nevertheless necessary.

"That's where education is key to help employees realize, 'Well, yes, you are going to be paying for it and that's going to make money tight, but if you're disabled and you don't have that protection you go from here to zero,'" she says. "It's important to help them kind of see the long-term benefit of investing in something like that, that it truly is protection."

Griswold says it all starts with new-hire orientation. Making sure the benefits communication conversation starts off on the proper footing can make all the difference as employers continue to struggle with a multitude of sometimes conflicting objectives, like managing costs, competing for human capital and improving worker health and productivity.

And Kwicien, like many, says it is important to always keep a company's total costs in extreme focus.

"For most employers, their benefits program is anywhere from 9% to 11% of their total operating expenses for running their business."

That's right behind payroll for many companies.

The size of the check employers - even with all the recent cost-shifting - continue to write for their benefits has advisers like Ilene Salcman, an executive vice president for the Warner Companies, moving further upstream.

Before it becomes a new-hire orientation problem it becomes a strategic business decision for the company, according to Salcman.

Employers spend a lot of money on benefits. They expect that money to work for them, helping them attract and retain talent. If employees don't understand and don't value their benefits then it's wasted money.

OK, so communicate better. But it's not that easy, she says. "It's costly and time-consuming," according to Salcman. "We actually use that as a strategy to help position voluntary. One of the things that we do when we look at making an appeal to an employer is to ask, 'What is your goal for the coming year in terms of what you are doing with your employee benefits?'"

Kwicien says it's also important for advisers to understand that a company's employee benefits goals should be consonant with the reigning business strategy. "Trying to understand the business issues first and then figure out a benefits plan design" is the proper sequence, according to Kwicien.

Salcman agrees. It's much easier to map your route if you know your destination. "Their goals are tied to the strategic goals of the organization. What we try to do is rather than sell a product or sell a thing, we're getting into the organizational strategic plan, what they are trying to accomplish long term ... and really get into positioning our solutions," Salcman says.

It's that type of fact-finding that will help set the stage for a profitable and productive open enrollment. Employers that understand the cost and value of employee benefits will be more likely to allow for greater employee access to help ensure their investment in both core and voluntary offerings pays off.

"It gives us an opportunity then to meet one-on-one and help employees understand where the shortcomings are, what the differences are and then position voluntary in a consultative way to sort of wrap around and fill the gaps," she says.

Two steps forward, one step back

Cost remains a paramount concern for employers, despite the occasional and sometimes short-lived epiphanies of executives recognizing that human capital investment is both a prudent and defensible strategy for business success.

"[Cost concerns are] more prevalent than ever," according to Reber.

And while the economic malaise of the past year has employers once again laser-focused on wringing savings out of all corners of the business, Kwicien says it presents a conundrum for a company's benefits budget.

"They need the fewer dollars they spend to do more for them," he says.

But in a company's effort to accomplish one objective (reducing costs) they may short-circuit another (improving value).

Le Phan, another senior executive with the Warner Companies, says the rise and spread of self-service benefits enrollment and education technologies are an example of how the industry is sometimes at odds with itself.

"Oftentimes I see large employer groups gravitating toward self administration, offering Web-based portals for employees to log on and an access and understand their benefits. It's contrary to what the needs of the employees are. The needs of the employer sometimes are contrary and in conflict with what the needs of the employee are," Phan says. "Our job basically is to merge the two."

And right now, with larger clients, that sometimes means disabusing them of the notion that the Web is enough.

Chester Bullard, a national practice consultant for Unum, highlights the limitations of a static, Web-only strategy by detailing the take-up rate for long-term care insurance with a 6,500-life employer.

"It took me about an hour and a half," he says, after going online and acting as a proxy for the companies workforce. "You have to calculate your own rate, and there are five rate sheets," Bullard says of the size and complexity of the information that awaits workers interested in signing up for the benefit.

While the employer wasn't sure what the take-up rate was for the program, Bullard found out - eight. That's eight out of 6,500. It's emblematic of one of the primary communication problems facing the industry, he says.

"There's a huge drive toward efficiency models. So you have the self-service Web-based that's really dominated and what we're finding is it is efficient. It's a lot more cost effective than printing out things," according to Bullard.

But is it more effective? Not even close. "If you measure by participation, not just voluntary products ... it's substantially less. It's efficient but it's not effective."

Rodger Bayne, CEO of Client First Brokerage Services, says there's no going back to the way things were. Web-based communication is here and it's not going anywhere. The challenge, he says, is boosting the efficacy of more cost-efficient Web models. Rethinking what a Web site is and what it does is the place to start, according to Bayne.

"A Web site is not a marketing tool. It's a tool. You got to get people [to it]. You got to market to get them to it," he says. "Communication done in the worksite is going to have to support whatever Web engines or Web portals you have created. You've got to drive them to those engines to get them to work."

And just like the multi-layered complexity of the health and ancillary insurance markets is what thwarts many workers from understanding and properly appreciating their benefits, it will take a multi-layered and complex marketing and communications program to help them bridge the knowledge gap.

Reber's firm focuses on giving the employee's family enough information through a variety of mediums and delivery mechanisms so they can make a decision. He knows both where that moment of understanding is and isn't likely to happen.

"The employee's not going to make it at work, they are not going to take the time to understand and educate themselves at work. But if we can get them enough information that's easy to read and clear cut so they can sit at the dinner table at night, that's what we're trying to create," Reber says.

Bullard's confident that with the right mix of messaging and medium he can do a heck of a lot better than one-tenth of one percent participation for the aforementioned voluntary long-term insurance offering.

"You have to be committed to multiple approaches," he says. "We did implement a couple of different strategies, face-to-face, group, live call center, co-browsing other technologies. We'll traditionally get 30% by having those combination strategies."

It's both the challenge and the opportunity according to Phan. You have to always be mindful of the amount of time and effort you're asking not only of a client's HR professionals, but also of individual employees. You must also have a plan for a successful enrollment, otherwise it's a waste of everyone's time.

"What we need to realize is that you need to have several venues and not limit yourself," she says.